Wayfair(US:W) ZACKS·2025-10-29 17:45Core Insights - Wayfair reported third-quarter 2025 non-GAAP earnings of 70 cents per share, exceeding the Zacks Consensus Estimate by 52.17% and showing a year-over-year increase of 218.2% [1][8] - Net revenues for the third quarter rose 8.1% year over year to $3.1 billion, beating the Zacks Consensus Estimate by 3.62% [1][8] Revenue Performance - Last Twelve Months (LTM) net revenues per active customer increased 6.1% year over year to $578, surpassing the Zacks Consensus Estimate by 5.75% [2] - Active customer base declined 2.3% year over year to 21.2 million, missing the consensus mark by 3.19% [2] - U.S. net revenues (87.5% of total) increased 8.6% year over year to $2.7 billion, beating the Zacks Consensus Estimate by 4% [3] - International net revenues (12.5% of total) rose 4.6% year over year to $389 million, exceeding the consensus mark by 3.48% [3] Customer Metrics - Orders per customer for the quarter were 1.87, up from 1.85 in the previous year, beating the Zacks Consensus Estimate by 3.32% [4] - Average order value increased from $310 to $317 year over year, slightly missing the consensus mark by 0.47% [4] - Total delivered orders in the quarter reached 9.8 million, up 5.4% year over year, surpassing the Zacks Consensus Estimate by 3.98% [4] - Repeat customers placed 7.9 million orders, accounting for 80.1% of total orders delivered, a 6.8% year-over-year increase [5] Financial Results - Gross profit for the third quarter was $934 million, up 7% year over year, with a gross margin of 30%, narrowing by 30 basis points [6] - Adjusted EBITDA was $208 million, up 74.8% year over year, with an adjusted EBITDA margin of 6.7%, expanding by 250 basis points [6][8] - GAAP operating income for the third quarter was $38 million, a significant turnaround from an operating loss of $74 million in the previous year [9] Cost Management - Advertising expenses decreased 6.8% year over year to $330 million [7] - Selling, operations, technology, and general and administrative expenses decreased 7.3% year over year to $445 million [7] Balance Sheet & Cash Flow - As of September 30, 2025, cash, cash equivalents, and short-term investments were $1.2 billion, down from $1.4 billion as of June 30, 2025 [10] - Long-term debt decreased to $2.7 billion from $2.9 billion as of June 30, 2025 [10] - Net cash used in operations amounted to $155 million, compared to $273 million cash from operations in the second quarter [10] - Non-GAAP free cash flow for the third quarter was $93 million [10] Future Guidance - For Q4 2025, Wayfair expects revenue growth in the mid-single digits year over year, factoring in a 100 basis-point headwind from the closure of its German operations [11] - Gross margin is anticipated to range between 30% and 31% by the end of Q4 2025 [11] - Customer service and merchant fees are expected to remain just below 4% of net revenues, while advertising expenses are projected to represent 11-12% of net revenues in Q4 [12]